CUs weigh Crypto’s effects on member loyalty

Nearly a third of US consumers own cryptocurrency, and consumers who own crypto consider it when making various financial decisions. For example, 45% of crypto holders maintain accounts with financial institutions (FIs) that offer crypto products.

Our data shows that cryptocurrency’s appeal to these consumers is very strong. They represent a key segment of mostly higher-income and younger consumers whose needs will become more critical for FIs – especially credit unions (CUs) – to address, making banking innovation necessary for all FIs.

“Credit Union Innovation: Bridging the Cryptocurrency Divide,” a PYMNTS and PSCU collaboration, provides insights from 4,282 US consumers and 100 CU leaders about CU members’ interest in cryptocurrency, why CU leaders are bearish on crypto, and how this disconnect affects member loyalty.

Some of our key findings include the following:

• While 3 in 10 US consumers own cryptocurrency, nearly half who don’t say a lack of knowledge is holding them back.

PYMNTS found that nearly half of consumers say their main reasons for not using cryptocurrency have to do with their lack of knowledge about it and their distrust of it, suggesting that more CUs and other FIs are educating members and account holders about this form of digital currency. , the more likely members will join the game.

• A third of consumers who are highly interested in cryptocurrency say they are willing to change where they hold their accounts to access innovative products.

Crypto’s appeal is strong enough to influence consumer behavior, with 33% of consumers highly interested in crypto willing to change their FIs for more innovative products, but only 45% of these consumers say their FIs offer crypto products and -services. This willingness to switch FIs poses a dilemma for CUs that have yet to launch crypto products and services, and presents an opportunity for those offering these products to win new business.

• CU executives remain reluctant to offer innovative cryptocurrency products to members.

We found that 56% of CU managers say they are only slightly or not at all interested in offering crypto products to members. Among these executives, 66% cite crypto’s sharp decline in investment value in 2022 and volatility as reasons for the lack of interest in the digital currency, and 43% expect demand for crypto to fade.

Despite CU executives’ expectations that demand will slow, PYMNTS found member interest in crypto grew in 2022, and many consumers would switch FIs to access more innovative products. As FIs do more to educate their account holders, interest in and use of cryptocurrency may continue to grow.

To learn more about how CU and banking innovation, especially with crypto products and services, can attract more consumers and increase member loyalty, download the report.